Melbourne real estate: Where to buy in 2023, according to the experts
Affordable areas with good public transport links and burgeoning infrastructure will be smart buys. SEE THE EXPERT PICKS.
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Affordable areas with good public transport links and burgeoning infrastructure will be smart long-term investments for buyers, despite difficult conditions continuing in 2023, experts say.
Developing fringe areas of Melbourne around Melton, Garfield and Bunyip in the southeast, as well as suburbs in Bendigo, Ballarat and Geelong have strong credentials.
Leading real estate experts say buyers should consider public transport and travel time to the CBD, as well as planned local infrastructure, when assessing potential purchases next year.
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Four-bedroom family homes with a “lifestyle element” including a pool or outdoor entertainment area, and perhaps an added study, are also expected to remain popular.
The property market is tipped to remain in buyers favour with similar conditions to the past few months before potentially balancing out in the back half of 2023.
Garfield and Bunyip on the fringe of Melbourne’s southeast were among the top areas with the most potential buyers per listing, in suburbs where house values have increased over the past three months, a metric used by PropTrack to pick its suburbs to watch of 2023.
Barry Plant chief executive Mike McCarthy also flagged the corridor including Berwick, Pakenham, Bunyip and Drouin as a good bet for first-home buyers, to families and investors.
“Pakenham hasn’t missed a beat … there’s good infrastructure, it’s on the metro train line. It’s a good place to buy or invest — Pakenham is rock solid,” he said.
“Drouin and Bunyip are great areas for families, there’s land all around them and still proximity to the city and reasonable infrastructure too.
“The current rental return out in Drouin is as high as 6 per cent, which is a hell of a return for investors, so you can get a good rental return while you wait for capital gains to kick in during the next phase of the property cycle over the next few years.”
Mr McCarthy also celebrated the City of Melton for is affordability and future infrastructure, and Craigieburn in the north.
Advantage Property Consulting director Frank Valentic championed the middle ring west and north as offering the “best bang for buck”, selecting Ardeer, Thomastown, Reservoir, Sunshine West and Fawkner as his top picks for first-home buyers.
“First-home buyers are still going to be active and strong, when people make a decision to get out of the rental cycle they still want to get out and buy their first home,” he said.
“These are suburbs generally where you can get in under $750,000, which is the ideal point because of stamp duty savings, and that end of the market will probably be the strongest.
“With less competition, it’s a good chance to get in and in the middle ring they can hopefully still get a house or a townhouse.”
Mr Valentic expected the shift to lifestyle elements — both at home with a pool, entertaining area and study — and to areas like the Mornington Peninsula and Surf Coast to continue.
Ray White chief economist Nerida Conisbee said city apartments were a good bet for investors, with students returning and the CBD “a fun place to live again”.
She said apartments in Rosebud and Windsor also had strong credentials.
While regional Victoria is also dipping as the Melbourne market does, the 2026 Commonwealth Games is expected to provide further boost in the years to come.
Mr McCarthy said suburbs like Kangaroo Flat in Bendigo, which also featured in PropTrack’s list of suburbs to watch for units, were clever areas to look at.
“Kangaroo Flat is the city side of Bendigo, it takes about 20 minutes off the trip to Melbourne. There’s a train station there or it's a 1.15hr drive to Melbourne,” he said.
“There’s pretty good value there up to $750,000 for first-home buyers, plus the benefits of a tree change, particularly with Commonwealth Games infrastructure starting to ramp up there. There will be a big legacy.”
PropTrack economist Paul Ryan said cash rate decisions early in the year would be central to what happens to the property market, which would begin similarly to recent months.
“When the RBA meets in February it will have updated inflation data for the December quarter. We expect maybe one or two more interest rate rises and that we’ll continue to see prices fall over the start of the year,” he said.
“Migration and rental demand will continue to grow and be really strong next year and these factors could stabilise prices and perhaps push them back up in the second half of the year.”
Property Home Base buyer’s advocate Julie DeBondt-Barker said there was “a bit around” for first-home buyers and it was more the $1.2-$3m range that “was a bit light on”.
She said apartments had become “a bit more popular” and buyers could potentially do well because it was a competitive market with a lot of them for sale.
Melbourne suburbs to watch in 2023
House
Rank, Suburb, SA4, Potential buyers per listing, 3 month % growth in AVM, November 2022 AVM
1, North Melbourne, Melbourne – Inner, 119, 0.5%, $1,339,000
2, Flinders, Mornington Peninsula, 115, 3.8%, $3,682,000
3, Garfield, Melbourne – South East, 56, 1.8%, $818,000
4, Cranbourne South, Melbourne – South East, 52, 1.4%, $843,000
5, Bunyip, Melbourne - South East, 49, 1.1%, $871,000
Unit
1, Kew East, Melbourne – Inner East, 79, 2.8%, $958,000
2, Beaumaris, Melbourne – Inner South, 74, 1.3%, $1,248,000
3, Ripponlea, Melbourne – Inner, 71, 2.1%, $595,000
4, Frankston South, Mornington Peninsula, 71, 4.3%, $715,000
5, Balaclava, Melbourne – Inner, 69, 2.6%, $620,000
Regional Victoria suburbs to watch in 2023
House
1, Quarry Hill, Bendigo, 57, 1.0%, $614,000
2, Trentham, Ballarat, 57, 1.6%, $1,002,000
3, Nichols Point, North West, 50, 1.3%, $769,000
4, Ironbark, Bendigo, 45, 2.6%, $568,000
5, Maiden Gully, Bendigo, 43, 0.1%, $826,000
Unit
1, West Wodonga, Hume, 32, 2.4%, $358,000
2, Bendigo, Bendigo, 24, 0.2%, $454,000
3, Morwell, Latrobe – Gippsland, 21, 0.1%, $329,000
4, Ballarat East, Ballarat, 15, 3.9%, $437,000
5, Kangaroo Flat, Bendigo, 15, 4.6%, $426,000
Source: PropTrack
The suburbs with the most potential buyers per listing that have had house/unit values increase over the last three months – so essentially where prices are still rising and demand is strong. We’ve provided the top five for each capital city and regional area for both houses and units.
*** AVM is PropTrack’s Automated Valuation Mode
FRANK VALENTIC’S PICKS
FIRST-HOME BUYERS (UP TO $750,000)
Ardeer
Thomastown
Reservoir
West Sunshine
Fawkner
Rosebud
Capel Sound
Geelong
Ballarat
Bendigo
FAMILIES ($750,000-$2m)
Thornbury
Balaclava
Seddon
Northcote
Ascot Vale
Dromana
McCrae
Torquay
Safety Beach
Mt Martha
INVESTORS
Reservoir
Preston
Parkdale
Mentone
Mitcham
Frankston
Dromana
Rosebud
Mornington
Geelong
NERIDA CONISBEE’S PICKS
FIRST-HOME BUYERS (UP TO $750,000)
Epping
Mildura
Rosebud (apartments)
Windsor (apartments)
Buninyong
FAMILIES ($750,000-$2m)
Balwyn North
Altona
Torquay
Ivanhoe
Patterson Lakes
INVESTORS
Melbourne CBD (apartments)
Mallacoota
Box Hill South
Melton
Geelong West
MIKE MCCARTHY, SOMETHING FOR EVERYONE
Melton
Aintree
Brookfield
Rockbank
Thornhill Park
Kurunjang
Pakenham
Drouin
Berwick
Bunyip
Craigieburn
Kangaroo Flat, Bendigo
Flora Hill, Bendigo
Sebastopol, Ballarat
Wendouree, Ballarat
Ballarat Central
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Originally published as Melbourne real estate: Where to buy in 2023, according to the experts
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